“What happens if I need long-term care in a nursing home and I can’t afford to pay for it?” I hear this question frequently from clients who are concerned about long-term care because the cost of nursing home care is so high. In Massachusetts, nursing home care costs anywhere from $11,000 to $17,000 per month ($132,000 to $204,000 per year) and continues to increase regularly. The short answer is Medicaid (MassHealth), a joint federal/state government benefits program, will cover your long-term care nursing home expenses so long as you meet the medical and financial eligibility criteria for the program. Here are 5 important numbers to keep in mind with respect to eligibility for long-term care Medicaid benefits in Massachusetts.
You Must Be 65 Years of Age or Older.
The first hurdle to apply for and receive Medicaid long-term care benefits is that you must be 65 years of age or older.
You May Not Have More Than $2,000 of Countable Assets.
Medicaid has strict limitations with regard to the value of assets an individual may own and qualify for long-term care Medicaid benefits to pay for nursing home care. Assets may be deemed to be “non-countable,” “inaccessible” or “countable.” Countable assets include assets such as bank accounts, investments, most retirement accounts and the cash value of life insurance, to name a few. An individual may have only $2,000 in countable assets in order to be eligible for long-term Medicaid benefits. Non-countable assets include pre-paid burial accounts, one automobile and a primary residence. Inaccessible assets are less common and include things like the proceeds from a lawsuit that has not yet settled or an anticipated inheritance during the estate administration phase and before distribution. Countable assets above that $2,000 threshold must be spent down (in permissible ways) before eligibility will be achieved.
A Spouse Living in the Community May Keep an Additional $126,420 of Countable Assets.
If the individual who is residing in the nursing home and applying for Medicaid benefits has a spouse who is living in the community (i.e. not in a nursing home) that community spouse has asset limitations, too. The spouse is allowed to own only $126,420 of countable assets for 2019. This amount, called the Community Spouse Resource Allowance (CSRA), is typically increased every year. This means that a married couple living in Massachusetts may have a combined total of $128,420 in countable assets (2019). If they have additional countable assets, such as an investment account or an IRA worth $100,000, then those funds must be spent down before the nursing home spouse will be eligible for Medicaid benefits. An experienced elder law attorney can advise a married couple of options for dealing with excess assets in this situation.
Beware the 5-Year Look Back Period!
An important thing to remember about Medicaid benefits eligibility is that Medicaid will review any transfers of your assets made within the five years (60 months) prior to the Medicaid application. This is often referred to as the 5-year look back period. Medicaid can request copies of account statements for the last five years to check for gratuitous transfers. For example, if you gifted $15,000 to your child three years prior to applying for Medicaid benefits, Medicaid will view this as a disqualifying transfer of funds because you could have otherwise utilized that money to cover a month of your nursing home expenses. Disqualifying transfers made within the 5-year look back period will result in a period of ineligibility.
The Applicable Divisor is Currently $367.21 Per Day.
Medicaid determines the period of ineligibility for Medicaid benefits due to a disqualifying transfer by dividing the value of the asset transferred by the average daily cost of a nursing home as determined by the state. As of November 1, 2019, this transfer divisor is $367.21 per day in Massachusetts. This means that $15,000 you gifted to your child three years ago will result in 41 days of ineligibility for Medicaid benefits to you now. But here’s the kicker – the disqualification period only begins to run once you have no more than $2,000 of countable assets. This means that after all of your funds are spent, you will then be ineligible for Medicaid benefits for 41 days. This is a serious ‘trap for the unwary’ and why long-term care planning is so important.
Another trap for the unwary can occur when someone has made a large gift, such as putting the house in the children’s names, and then applies for Medicaid benefits prior to the expiration of five years. In that case, the ineligibility for Medicaid benefits can extend well beyond five years from the gift.
The financial eligibility rules for long-term Medicaid benefits are complex and everyone’s situation is unique. The elder law and medicaid planning attorneys at Samuel, Sayward & Baler LLC can assist you with planning in advance to preserve your assets for your family in the event you require Medicaid long-term nursing home care benefits and can help you prepare to navigate the Medicaid application process.
Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters such as long-term care planning. She is an active member of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA). This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.
© 2019 Samuel, Sayward & Baler LLC